Morgan Stanley Q4 Profit Misses On Bond Trading

by Ike Obudulu Posted on January 21st, 2019

New York City, USA : Morgan Stanley (MS) Morgan Stanley announced fourth-quarter earnings adjusted profit of 80 cents a share, lower than the 89 cents expected by wall street analysts.

Morgan Stanley said net income rose to $1.5 billion from the prior year, but that missed analysts’ $1.6 billion estimate.

The Wall Street bank said fixed-income trading revenue had fallen 30% to $564 million, the worst performance for that unit in three years.

Here are the key numbers:

  • Revenue: $8.5 billion, a 10% decline from last year and a miss to Wall Street’s prediction of $9.4 billion.
  • Adjusted net income: $1.5 billion, up 138% from the prior year when a change to the tax code battered earnings. Analysts had predicted $1.6 billion.
  • Institutional securities: $3.8 billion, down 15% from the prior year. Fixed income trading slumped 30% to $564 million. KBW analysts had predicted $4.1 billion for the division, and $646 million for fixed-income trading.
  • Wealth management: $4.1 billion, down 6% from the prior year. KBW analysts thought the bank’s biggest division may bring in $4.3 billion in revenue.
  • Investment management: Revenue of $684 million, up 7%. KBW analysts predicted $676 million.

Fourth Quarter Business Overview:

  • Firm net revenues were negatively impacted by the volatileglobal market environment.
  •  Institutional Securities net revenues reflect strong results in investment banking with particular strength in M&A advisory and solid results in equity sales and trading. Lower performance in fixed income sales and trading reflects the market volatility.
  • Wealth Management net revenues were $4.1 billion with a pre-tax margin of 24.4%. Results reflect the difficult environment, seasonality and certain compensation-related items.
  • Investment Management net revenues were $684 millionwith AUM8 of $463 billion.

Full Year Business Overview

  • Record net revenues in Investment Banking of $6.1 billion; Investment Banking Ranked #1 in Global
    Completed M&A, Global IPOs and Global Equity.15
  • Record Wealth Management net revenues of $17.2 billion on strong management fees and increased net
    interest income; Pre-tax margin of 26.2%7reflecting continued operating leverage.
  • Investment Management reported strong asset management fees and positive long-term net flows.


Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.

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